Correlation Between PENN Entertainment and HEXINDO ADIPERKASA

Can any of the company-specific risk be diversified away by investing in both PENN Entertainment and HEXINDO ADIPERKASA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining PENN Entertainment and HEXINDO ADIPERKASA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PENN Entertainment and HEXINDO ADIPERKASA, you can compare the effects of market volatilities on PENN Entertainment and HEXINDO ADIPERKASA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in PENN Entertainment with a short position of HEXINDO ADIPERKASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN Entertainment and HEXINDO ADIPERKASA.

Diversification Opportunities for PENN Entertainment and HEXINDO ADIPERKASA

-0.68

Correlation Coefficient

PENN Entertainment  HEXINDO ADIPERKASA

Excellent diversification

The 3 months correlation between PENN and HEXINDO is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding PENN Entertainment and HEXINDO ADIPERKASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEXINDO ADIPERKASA and PENN Entertainment is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on PENN Entertainment are associated (or correlated) with HEXINDO ADIPERKASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEXINDO ADIPERKASA has no effect on the direction of PENN Entertainment i.e., PENN Entertainment and HEXINDO ADIPERKASA go up and down completely randomly.

Pair Corralation between PENN Entertainment and HEXINDO ADIPERKASA

Assuming the 90 days trading horizon PENN Entertainment is expected to under-perform the HEXINDO ADIPERKASA. But the stock apears to be less risky and, when comparing its historical volatility, PENN Entertainment is 1.11 times less risky than HEXINDO ADIPERKASA. The stock trades about -0.01 of its potential returns per unit of risk. The HEXINDO ADIPERKASA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  29.00  in HEXINDO ADIPERKASA on October 11, 2024 and sell it today you would lose (3.00) from holding HEXINDO ADIPERKASA or give up 10.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

PENN Entertainment  vs.  HEXINDO ADIPERKASA

PENN Entertainment

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PENN Entertainment are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, PENN Entertainment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

HEXINDO ADIPERKASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HEXINDO ADIPERKASA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with PENN Entertainment and HEXINDO ADIPERKASA

The main advantage of trading using opposite PENN Entertainment and HEXINDO ADIPERKASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN Entertainment position performs unexpectedly, HEXINDO ADIPERKASA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in HEXINDO ADIPERKASA will offset losses from the drop in HEXINDO ADIPERKASA's long position.

The idea behind PENN Entertainment and HEXINDO ADIPERKASA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.